Social Security
Social Security refers to the federal Old-Age, Survivors, and Disability Insurance (OASDI) program passed in 1935. Social Security is a social insurance program that is primarily funded through dedicated payroll taxes called Federal Insurance Contributions Act tax (FICA). Tax deposits are formally entrusted to the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, or the Federal Supplementary Medical Insurance Trust Fund. According to the 2012 Annual Report of the Social Security Trustees, Social Security’s expenditures exceeded non-interest income in 2010 and 2011, the first such occurrences since 1983, and the Trustees estimate that this deficit will continue. The deficit of non-interest income relative to expenditures was about $49 billion in 2010 and $45 billion in 2011, and the Trustees project that it will average about $66 billion between 2012 and 2018 before rising steeply as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. After 2020, Treasury will redeem trust fund assets in amounts that exceed interest earnings until exhaustion of trust fund reserves in 2033.
Archive Related Items

Social Security in Need of Reform

5/3/15
from NCPA,
4/30/15:

Social Security is the cornerstone of retirement security in the United States today. A third of Americans depend on the program for almost all their retirement income; without it, one-in-five would have no retirement income. But the program so many depend on simply cannot afford what it promises today's workers and faces a shortfall of more than $13 trillion over the next 75 years. Reforms are desperately needed. The number of Social Security beneficiaries is growing faster than the number of workers sup­porting them — the number of elderly will near­ly double between now and 2034 (38.6 million to 74 million) while the number of new workers will only increase 16 percent. Here is a sample of the facts: - People are living longer and collecting more Social Security benefit checks: In 1940, life expectancy was 61.4 years for men and 65.7 for women. By 2000, life expectancy was 74.0 years for men and 79.4 for women; by 2050, life expectancy will be 80.0 years for men and 83.4 for women. - Fewer children are born each year: For each generation to be the same size as the one before (the replacement rate), women must have 2.1 children. In 1940, the fertility rate was 2.23. Today, the rate is 2.01 and by 2035 it is expected to trend downward to 1.98. - In all, the program faces an unfunded liability (the amount Social Security promises in benefits above what it will collect in taxes) of more than $26 trillion. Consider these solutions: - To shore up Social Security's financial shortfall, the government must increase the program's income (raise taxes), decrease expenses (reduce benefits) or find a new source of funding. - One way to create a new funding source is to allow younger workers to invest a portion of their payroll taxes into a personal retirement account (PRA). Over time, the PRA balances — with their accumulated interest and dividends — would replace an increasing portion of retirees'

More From NCPA:



365 Days Page
Archive Related Items
Comment ( 0 )